How to Get a Personal Loan with a 575 Credit Score: Smart Tips for Quick Approval

Even with a Low Credit Score, You Can Get a Personal Loan — Here’s How

In today’s fast-paced financial world, personal loans have become an essential tool for managing everyday expenses, emergencies, and festive shopping. But what if your credit score is just 575? Most people believe that getting loan approval with such a score is nearly impossible — yet, financial experts say it’s difficult but not hopeless.

A credit score below 650 generally means higher interest rates, stricter terms, and increased scrutiny from lenders. However, with the right strategy, proper documentation, and a trustworthy lender, you can still secure a personal loan and even improve your credit score in the process.

Understanding Your Credit Score and Loan Eligibility

When you apply for a loan, lenders assess your creditworthiness based on factors such as your repayment history, existing liabilities, and any past defaults or missed EMIs. A low credit score indicates a higher risk for lenders, but there are ways to offset this perception.

One effective method is opting for a secured personal loan by pledging collateral such as fixed deposits or property. This reduces the lender’s risk and increases your chances of approval. Alternatively, you can apply with a co-applicant or guarantor who has a good credit score, which makes your profile more reliable in the eyes of the lender.

Smart Tips to Improve Your Chances of Loan Approval

To get your loan approved even with a lower score, focus on building a strong application. Here are some practical steps:

Show repayment capacity: Submit strong income proof such as salary slips, bank statements, or IT returns to assure lenders of your repayment ability.

Choose a shorter loan tenure: Opt for a shorter duration loan to signal lower repayment risk and financial responsibility.

Borrow only what you can repay comfortably: Avoid overborrowing, as missed EMIs can further damage your credit profile.

Clear pending dues first: Pay off any existing debts before applying for a new loan to strengthen your credibility.

Avoid unnecessary loans and credit cards: Every new credit application leads to a hard inquiry, which can temporarily reduce your score.

Consult professionals: If unsure, speak to your lender’s customer support team or a certified financial advisor for guidance on the best loan options for your situation.

By following these steps, even individuals with a 575 score can improve their chances of approval and gradually build a stronger credit profile for the future.

Choose Regulated and Trustworthy Lenders

Financial experts emphasize that borrowers should always prefer RBI-regulated lenders. According to Vibhor Goyal of OneBanc, these lenders ensure transparency, security, and compliance with borrower protection norms.

As per the Reserve Bank of India (RBI), there are around 1,600 certified digital lending apps listed on its official website. Borrowing from these platforms helps safeguard you from predatory or fraudulent lending practices.

Goyal further explains, “For a ₹1 lakh personal loan with a 24-month tenure, lenders usually charge a processing fee of 0.5%–4%, plus 18% GST. The interest rate typically ranges between 14% and 24% per annum, resulting in an EMI between ₹4,800 and ₹5,300. Missing EMIs may lead to a penalty of 1–2% per month.”

Hence, borrowers should set aside EMI funds in advance to avoid penalties and ensure timely repayments. This financial discipline not only helps manage the loan smoothly but also contributes to improving your credit score over time.

The Bottom Line

Getting a personal loan with a 575 credit score may be challenging, but it’s not out of reach. By maintaining repayment discipline, choosing trusted lenders, and being strategic about your loan application, you can overcome the low-score hurdle.

A well-planned borrowing approach can help you meet your short-term financial goals while also setting the stage for a stronger financial future.